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LOCAL GOVERNMENT GRANT APPLICATIONS FOR WATER AND SEWER ASSISTANCE NOT FUNDED BY

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Number

of grant applications

Grant applications

amount (millions)

Total project

cost (millions)

State

Alabama..
Alaska.
Arizona
Arkansas.
California.
Colorado
Connecticut.
Delaware.
Florida.
Georgia
Hawaii.
Idaho.
Illinois.
Indiana
Towa.
Kansas.
Kentucky.
Louisiana
Maine..
Maryland.
Massachusetts
Michigan.
Minnesota
Mississippi
Missouri.
Montana.
Nebraska.
Nevada..
New Hampshire.
New Jersey
New Mexico.
New York
North Carolina.
North Dakota.
Ohio.
Oklahoma.
Oregon...
Pennsylvania
Rhode Island.
South Carolina
South Dakota.
Tennessee.
Texas.
Utah
Vermont.
Virginia
Washington.
West Virginia
Wisconsin
Wyoming
Puerto Rico
Virgin Islands.

National total..

51 15 31 52 271 73 95

8 135 43 19

3 191 77 67 60 28 107 48 47 225 308 63 29 104 14 45 16 27 163

13 426 48

7 255 51 47 317 26 44 17 47 224 60 33 55 63 36 85

5 25 1

$15. 68

7.27 11.85 20.97 158.17 19.71 59. 82

3.30 69. 12 19. 64 5.78

.69 89. 58 48.57 20.58 13.60 55. 89 70.17

8.31 22.44 93. 33 331. 20 42. 49 10.88 34.06

2. 47 16.80

4.30 11. 84 92.55

2.61 441.50 19. 12

2.01 204.45 15. 31 26. 18 158. 68 16.93 16. 63

3. 76 16. 33 55. 39 14.01

7.41 47. 10 17.06 25. 13 37. 79

.37 5. 78 . 14

$33. 66 17.15 26. 30 45.57 365.25

48. 62 155.36

6.99 164.03 46. 39 14.12

1.39 201.96 131.00 44.89 28. 89 136.54 158.16 18.58 51. 12 227.23 722.95 68. 76 28.48 80.56

4.89 48.64 11.27 27.00 209.20

6.83 887.13 51.30

3.51 420.62 36. 68 65. 68 343.72 39.08 48.40

8.07 38.91 130.52 33. 41 16.89 101.47 40.51 35.54 84. 74

79 13.81

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The CHAIRMAN. Thank you very much, sir.

The next witness will be Mr. Wilcox. Mr. Wilcox, you may proceed, sir, and you may identify anyone accompanying you.

Mr. BARRETT. I want to welcome Mr. Wilcox here. Of course, everybody knows Mr. Wilcox comes from the great State of Pennsylvania. He is secretary of the department of community affairs and I want to commend him this morning, Mr. Chairman, because since he has become the secretary of the department of community affairs, Pennsylvania has started to look up. We are accomplishing many things that we heretofore had not been able to accomplish and I want to congratulate Mr. Wilcox, for this fine job you are doing for Pennsylvania.

The CHAIRMAN. We are delighted to have you, sir, and you may proceed in your own way.

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STATEMENT OF WILLIAM H. WILCOX, SECRETARY, PENNSYLVANIA

DEPARTMENT OF COMMUNITY AFFAIRS, ACCOMPANIED BY JOHN ROSSO, COMMUNITY SERVICE CONSULTANT

Mr. Wilcox. Thank you very much, Mr. Chairman. It is always a special pleasure to be before a committee of which Representative Barrett is a member because he is always very kind in his hospitality to us.

I am, as Representative Barrett has indicated, the secretary of the department of community affairs in the Commonwealth of Pennsylvania and I have Mr. John Rosso, community service consultant of our local government services bureau in the department and Mr. Rosso will be available to deal with any of the technical aspects which we might want to cover.

Mr. Chairman, I have filed a statement with the committee and I think perhaps I can be more useful in my brief visit here this morning if I were to speak largely extemporaneously and perhaps summarize those comments rather than actually read the statement.

The CHAIRMAN. That will be satisfactory and your statement may be inserted at this point in the record.

(Mr. Wilcox's prepared statement follows:)

PREPARED STATEMENT OF WILLIAM H. Wilcox, SECRETARY, PENNSYLVANIA

DEPARTMENT OF COMMUNITY AFFAIRS We are coming to realize that the provision of community sewage treatment facilities is one of the major problems we are facing in this decade. We know it is one of Pennsylvania's biggest problems; we also know that although it is a serious situation all over the State, its hardest impact is in those areas which we can identify with rural poverty.

We can show this by pointing out that the U.S. Department of Labor has classified 30 of Pennsylvania's 67 counties within labor markets either of "substantial” or “persistent unemployment, or granted eligibility under Title I of the Public Works and Economic Development Act of 1965. We are talking about nearly half the land area of Pennsylvania, with slightly more than one-third of our population; these areas generally show as a southwest to northeast diagonal across the State, following the Appalachian chain, and including most of our declining coal regions. This is primarily the area which could benefit from the bill under consideration, if it were shown that sewage facilities, especially were needed.

To indicate need, we can turn to Pennsylvania's own efforts to require municipalities to install sewage facilities. These efforts have spanned more than half a century; Pennsylvania has seen the lack of adequate facilities as a health and environmental problem for a long time, and has enacted and implemented increasingly stronger laws as the seriousness of the situation increased.

The Sewage Facilities Act of 1965, puts real muscle into this effort. Under this new law, the Pennsylvania Department of Environmental Resources has issued new orders to 74 municipalities to construct treatment facilities; we can expect literally hundreds more, with administrative and enforcement capacity the only limiting factor.

Yet we find that, of those 74 local governments, only six lie outside the areas of serious'unemployment-the areas of "hard core” rural poverty.

We can see that this is a continuing trend. Two years ago, of 105 cases being prosecuted under Pennsylvania's Clean Streams Law, 76 were against municipalities (or authorities created by them); of these, 54, or 71 per cent, were located in these same "rural poverty counties.

We should make it clear that we are not critizing Pennsylvania's Department of Environmental Resources, which has absorbed the State's enforcement function. We certainly don't think its people, who are charged with the responsibility for bringing some order to this critical problem, are engaged in any directed effort to intensify the financial plight of our rural poor. We do think that what these figures show is that the most critical need for environmental facilities exists in those areas least able to pay for them.

It must also be understood that Pennsylvania has not callously passed off to its municipalities the whole burden of cost. As the problems have become more critical, State aid has become more generous. Beginning July 1, 1954, the State has made annual payments to municipalities of up to 2 per cent of the construction cost of sewage treatment plants and facilities, to be used for operation and maintenance. The 1965 Sewage Facilities Act provides for State grants of 50 per cent of planning costs; a 1970 amendment to our Clean Streams Law requires that all fines and permit fees for stream pollution be directed to a Clean Water Fund, to be used for alternative treatment facilities.

Meanwhile, beginning in 1968, Pennsylvania has been directed $20 million every two years into matching funds under Pub. L. 84-660. These funds come from our 500-million dollar Land Conservation bond issue, and pay 10 or 20 per cent of the cost of eligible treatment facilities to bring the combined FederalState share currently to 60 per cent of the cost of eligible facilities; one year, during 1969, we were paying enough to bring this share to 70 per cent. The Department of Environmental Resources has offered this State matching grant to 206 municipalities since July of 1968; cumulatively, under this program, the State has been instrumental in offering "660” money to about 600 of our local governments. We hope the current proposed amendments to Public Law 660, which would further increase the Federal matching grants under this program, will be adopted.

But two problems have developed which show the need for the kind of Federal aid which the bill under current consideration could provide. Both problems hit hardest at our poorest rural communities.

The first is that generally, in Pennsylvania, the “660” program affects only about one-third of the total cost of a community sewage system. This is because the collection system, which except for some interceptor lines, is not eligible for Federal matching funds. On the average, Federal funding extends to about onehalf the cost of installing the treatment facility. This aid, coupled with State assistance, is providing to our communities 60 per cent of about one-third of the total system costs. (Treatment facilities comprise about one-third of the total system costs.) The more scattered or sparse the development, the higher the proportion of the ineligible costs.

The other is that our poor communities-and generally, that means our rural communities-are not helped by a matching grant program because they cannot find that inevitable "local share.” It just isn't there. How can we realistically expect a municipality with nearly 30 per cent of its population on public assistance to launch a sewerage program? We have municipalities where the stumbling block is the simple requirement in the grant program that “prevailing wages” be paid; there are plenty of local citizens who would be glad to get the work for less, but this requirement drives the costs beyond the communities' reach.

What seems to be the result, therefore, is that these funds will be concentrated in those communities, primarily new suburban developments, which can afford the “local share.” Now we need a program—this kind of program-which will specifically help the poor communities which can't.

We said that the problem of providing sewage treatment facilities is becoming one of our most serious problems. In Pennsylvania, it is having far-reaching implications. The environmental problem is obvious; what is less obvious, but perhaps as serious, is that it is beginning to affect our total housing supply, and most seriously the supply of housing for low- and middle-income citizens.

Our Sewage Facilities Act gives the Department of Environmental Resources the duty to prohibit additional connections to systems which are inadequate or overloaded. Under this provision, the State has forbidden any further connections to the sewer lines in 80 of our municipalities; this means no new housing construction until the systems are improved or expanded.

The prohibition on new connections is a relatively new program; but we can see serious implications if other trends continue. We will have to expect that wealthier suburbs, where land costs are high and building codes encourage expensive homes, will come to be the only ones open to new construction. The implications are serious for those large numbers of our citizens who cannot afford to buy into these communities.

Nor do we want to let the absence of adequate sewage collection and treatment facilities become a new excuse for some municipalities to keep out denser development or multi-family uses. Pennsylvania has established its policy of ultimately requiring adequate swage treatment facilities in every community, and of giving substantial help, backed with legal enforcement.

Fortunately, this is one problem that money alone can solve. We have the technology and the administrative machinery. We do not have to fear any adverse social consequences to this program; and we know well enough the health and environmental results of failing to accomplish it.

Unfortunately, in total it will take vast amounts of money. And we think that to accomplish this task, special programs, such as that envisioned by the bill under consideration, will have to be used to bring in our areas of rural poverty. Pennsylvania, and hundreds of its municipalities, have demonstrated a willingness to tackle this as the serious problem that it is; but we are finding that parts of our State need special help. We are facing an emergency, and we urgently need the "Emergency Community Facilities and Public Investment Act of 1972.".

Mr. Wilcox. Thank you, sir.

I was a member of a three-member panel which held 3 days of public hearings in rural Pennsylvania about a year ago and two of the subjects most frequently mentioned as representing very critical problems for the rural poverty sections of Pennsylvania and particularly the areas inhabited, what we have come to call the rural landless poor, were the sewer problem and water problem. If I may I would like to read just a couple of paragraphs from the two sections of our final report dealing with these two subjects. These were a few of the comments about the water supply problem.

One of the most serious problems discussed at these hearings is the shortage or lack of supply of potable water, repeatedly identified with poor housing and with poverty conditions generally. From the record the problem appears most serious in the bituminous coal region of western Pennsylvania. The water supply was shown to be generally one of the critical needs of rural areas. The water supply problem divides into two interrelated topics: inability of existing water supply systems to provide satisfactory service and the contamination of individual water supply sources of those not ser ved by these systems.

In Pennsylvania, according to a group which appeared before us, we have 854 public water suppliers. Of these 295 are municipal authorities, 211 municipal systems, 348 private companies, and of these 348 private companies--I think this is an important figure53 percent of them had fewer than 500 connectors. Specific figures given in Indiana County, one of the counties where we held the hearings, that 23 suppliers served 56 percent of the population, and of these 13 had fewer than 500 customers, and even the average was a mere 290.

The problems of these small companies and their customers were entered into the record primarily at specific complaints and they had virtually everything one could think of to say about the fallacies and shortcomings of these small systems.

One lady testified, and I think her two or three sentences perhaps summarizes the problem as well as one could. She said her daughter has seven children and she tries to wash with an automatic washer and has to take the filter off four or five times and she doesn't have a tub of water in which she doesn't find tadpoles, leaves, etc., and she is only one of a lot of persons down there and they pay $4, a high water bill. They have been doing this for years. And other witnesses reported corrosion and sedimentation of home plumbing after only a few months. There was repeated testimony about unannounced and lengthy service disconnections and we have reason to believe some of these service disconnections by the private water companies, sometimes owned by the same person who owned the entire village, perhaps a village at one time had been a company town, actually turned off these water supplies as a disciplinary measure to punish the community when the landlord felt that the behavior was, from his point of view, unsatis

a

factory. Some customers were subject to 32 days without water during the summer. Low pressure was reported because of the 50-year-old main would burst under normal conditions.

Those are the kinds of problems that we encountered with respect to water supply in these rural areas of Pennsylvania, and one of the concluding recommendations of the report was that various Federal agencies, especially FHA and HUD, have programs to aid local water and sewer systems, but one witness reported that these agencies have 10 applications for every 1 for which funds are available.

Witnesses and panelists also note that even high percentage grants and loan programs are inadequate because the small local companies do not have the financial resources to provide the rest.

Well, we have similar problems with respect to the sewerage systems in these counties or more properly the lack of sewerage systems. One paragraph in the report, and I will read just one under the sewerage section testimony, states that “Despite Federal and State assistance programs, small communities usually effected by low personal incomes and other characteristics of a declining economy have no resources for providing the rest of the funds needed. The problem appears to be extremely serious because it is dangerous to public health. It is deleterious to the environment because it is so sensitive geographically. Further, a solution is difficult because of the high cost to be anticipated in correcting it.”

Well that, in short, is the problem as we perceive it in Pennsylvania.

There are many complicated formulas which require an expert really to understand in full detail, I guess, with respect to this, but Mr. Rosso tells me we can make the generalization that under the most ideal circumstances conceivable the best that a community can do is to get two-thirds of the cost of a sewer system, that is, both the treatment and the collection system, from a source other than local sources; and the average is probably just a bit over one-third of the total cost.

The second point I would like to make is that the community with the greatest need frequently have the fewest resources. Of 74 communities ordered by the Pennsylvania Department of Environmental Resources to construct sewerage facilities under the Sewerage Facility Act of 1965, only six were outside areas of serious unemployment.

Could you hold that map up for us a moment? This pink area on the map here, the shaded area, represents areas of substantial unemployment, 6 percent or more, and these communities have been cited by our department of environmental resources to install treatment facilities. You can see that the communities that have been cited are virtually, with five or six exceptions, in the areas of greatest economic need and in a few cases just across the border from the county just as bad off as the adjoining communities, but for statistical reasons doesn't show in the shaded area. So I think that this map dramatically represents the problem in Pennsylvania as we see it.

So in short the third point I want to make is that these matching programs, since they are available to the communities, which have the resources to match them, is a kind of Robin Hood in reverse in this situation and when you combine that with the fact that, for example, in Pennsylvania we are not permitted by the constitution to have a graduated income tax, so we have a flat income tax and

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